Tech stocks lead market's dip

Lack of faith in major Facebook acquisition fuels late loss of gains

Associated Press

Associated Press

Published 8:20 pm, Wednesday, March 26, 2014

NEW YORK, NY - MARCH 26: Characters from the game Candy Crush are seen on the floor of the New York Stock Exchange (NYSE), in honor of the mobile gaming company King holding its initial public offering at the NYSE on March 25, 2014 in New York, United States. King is the maker of the popular mobile game Candy Crush. (Photo by Andrew Burton/Getty Images) ORG XMIT: 481123739

NEW YORK, NY - MARCH 26: Characters from the game Candy Crush are...

Michael Smyth, left, works with fellow traders on the floor of the New York Stock Exchange, Wednesday, March 26, 2014. The stock market opened higher Wednesday after a strong report on American manufacturing. The maker of the hit game "Candy Crush Saga" flopped in its market debut.(AP Photo/Richard Drew) ORG XMIT: NYRD112

Michael Smyth, left, works with fellow traders on the floor of the...

A trader works on the floor of the New York Stock Exchange, Wednesday, March 26, 2014. The stock market opened higher Wednesday after a strong report on American manufacturing. The maker of the hit game "Candy Crush Saga" flopped in its market debut.(AP Photo/Richard Drew) ORG XMIT: NYRD110

A trader works on the floor of the New York Stock Exchange,...

Trader Richard Scardino, right, works on the floor of the New York Stock Exchange, Wednesday, March 26, 2014. The stock market opened higher Wednesday after a strong report on American manufacturing. The maker of the hit game "Candy Crush Saga" flopped in its market debut.(AP Photo/Richard Drew) ORG XMIT: NYRD111

The stock market continued its recent pattern of one step forward, one step back.

After starting the day higher following an encouraging report on orders for manufactured goods, stocks drifted lower in afternoon trading Wednesday and gave up their gains from a day earlier. Facebook led the technology sector lower as investors gave the company's latest acquisition the thumbs-down.

The Standard & Poor's 500 index fell the most in two weeks and is now flat for the year. Investors are waiting for a catalyst that will either push the market higher or cause a sustained sell-off. Many anticipate the stock market will resume its upward trajectory later in the year as the economy strengthens following an unusually harsh winter.

"We're going through this back and forth, I would call it a consolidation phase, digesting the huge gains we've had," said David Lafferty, chief market strategist at Natixis Global Asset Management. "Most of the movement in stocks will tend to be in the latter half of the year."

The S&P 500 fell 13.06 points, or 0.7 percent, to 1,852.56. The index is up 0.2 percent for the year, after rising almost 30 percent in 2013.

The Dow Jones industrial average lost 98.89 points, or 0.6 percent, to 16,268.99. The technology-heavy Nasdaq composite fell more than the other indexes, giving up 60.69 points, or 1.4 percent, to 4,173.58.

Facebook was one of the biggest losers. The social media network slumped $4.51, or 6.9 percent, to $60.38 after announcing a $2 billion acquisition of virtual reality company Oculus late Monday. It was Facebook's second big acquisition in as many months. Last month the company announced that it would pay $19 billion for messaging startup WhatsApp.

Another loser in the technology sector was King Digital Entertainment. The online games company, which makes the popular "Candy Crush Saga," slumped on its first day of trading. The company raised $499.5 million in an initial public offering. The stock fell $3.50, or 15.6 percent, to $19 on its first day of trading.